Choose the true statements about variable and absorption costing from the following:

1. Variable costing excludes administrative costs from inventory.
2. Variable costing is unacceptable for external reporting.
3. Variable costing profits fluctuate more closely with sales.
4. A proponent of absorption costing would argue that fixed factory overhead is more closely related to the capacity to produce than to the production of individual units.

	A.	1 and 2.
	B.	3 and 4.
	C.	1, 2, and 3.
	D.	1, 2, 3, and 4.